States with stronger health insurance rate review authority experienced lower premiums in the individual market in 2010-13

Pinar Karaca-Mandic, Brent D. Fulton, Ann Hollingshead, Richard M. Scheffler

Research output: Contribution to journalReview articlepeer-review

10 Scopus citations

Abstract

States have varying degrees of review authority over health insurance carriers' rates, including prior approval authority over proposed rates and requirements for loss ratios, the proportion of premium revenues spent on medical claims. The Affordable Care Act (ACA) requires carriers in certain categories of health insurance to provide public justification for rate increases of 10 percent or more. We collected data on how states changed their rate review authority and requirements during 2010-13, the years immediately after enactment of the ACA, and we combined these data with carrier filings. We found that adjusted premiums in the individual market in states that had priorapproval authority combined with loss ratio requirements were lower in 2010-13 ($3,489) than premiums in states with no rate review authority or that had only file-and-use regulations, which gave the states no authority to block rate increases ($3,617). Adjusted premiums declined modestly in prior-approval states with loss ratio requirements, from $3,526 in 2010 to $3,452 in 2013, while premiums increased from $3,422 to $3,683 in states with no rate review authority or file-and-use regulations only. Our findings suggest that states with prior approval authority and loss ratio requirements constrained health insurance premium increases.

Original languageEnglish (US)
Pages (from-to)1358-1367
Number of pages10
JournalHealth Affairs
Volume34
Issue number8
DOIs
StatePublished - 2015

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